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Meetings: Special, emergency, executive session


Guest Tammy C
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Improper voting procedures contrary to bylaws and statute allowed the President and Treasurer to remain in their positions for a decade.  Bylaws state members elect directors and directors elect officers at 'the first board meeting after the annual membership meeting'.   However, the membership has been voting for officers for a decade.  The votes held by the developer kept these officers in their positions.  A proper election of officers, in accordance with our docs and state statute, was conducted.  The long time president was not reelected to her long time position, and she became a member at large.

New Board members discovered that over the past decade our association lost thousands of dollars in dues/assessments due to the Treasurer allowing the developer to return to the "Developer Exception" rate of 1/5 the 'normal' rate on repossessed properties.  The Developer Exception allows for the developer to pay 1/5 the 'normal' rate on "Unsold" properties. This practice carried the association's revenues below the revenues deemed viable for turnover ... in 2007!  New Directors determined that a property cannot be repossessed if it is not 'sold' and demanded full assessments.  The Treasurer refused to comply with the decisions of the board and our docs.  The board wrote a letter requesting full assessment from the developer on repossessed properties.  Proper/full assessments were paid for 2018 & 2019.  A campaign of resistance, hostility and misinformation began.

Two weeks ago, new directors received an email from the developer that stated we were removed from office.  Yesterday we received a 'notice of a special meeting' for August 31, from the Treasurer.  The Treasurer notes that the purpose of the special meeting is to recall the officers: President, Vice President and Secretary, and two members at large.   See: Treasurer's 'Notice' below.  The email is only addressed to 8 people.  We wonder if the Treasurer sent a different letter to all the other landowners.

Statute - 53-8-24:  Officers can be removed 'by the board'.  Docs state Officers can be removed by those who elected them. 

The Treasurer's notice informs that the 'special meeting' is also the 'annual membership meeting'.  The BoD had approved a motion months ago, for the annual meeting to be held in October.  The Treasurer notice cites 'approved' bylaws that are undated and unsigned, and were held in her home - out - of - state.  They are not available for review.  The chicanery is unfathomable. 

An attorney has been contacted.  However, a meeting is required to approve the expense of an attorney.  Time is now a critical factor.  Guidance for proper notice and meeting 'type' is requested.   

Sincere appreciation for your time and attention.

Tammy
 

Treasurer's email 'notice':

In accordance with the Bylaws, all approved versions, and other HOA Laws, the members are calling a special meeting in August. This meeting will serve as a General *redacted* Meeting. This notice is being sent out to inform the *landowners* that the meeting will be on August 31, 2019 at the *redacted* Community Center starting at 1:00 pm.

This meeting will be for the recall of board members and election of new officers.

If you are interested in running for an office please contact Eileen Simmons as soon as possible.

Thank you for your time in this matter. If you have any further questions you can contact *redacted*.

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Tammy, I'm afraid your question is as much or more a legal question then it is a parliamentary one and is probably outside the scope of this forum. We do not give legal advice.

As to the Parliamentary issues, and especially the issue of what it takes to have a meeting of the membership, whether regular or special, the answer is more likely to be contained in your own bylaws and governing documents and state law than in Robert's Rules of Order.

Your situation is rather complex with several issues and you could probably benefit most from the services of a professional parliamentarian. The National Association of Parliamentarians and the American Institute of  Parliamentarians, which are the two national parliamentary organizations, both provide referral services for credentialed parliamentarians. Both organizations have websites. The National Association of Parliamentarians is the larger of the two organizations and probably has a more useful website.

If you can provide us with the exact language of your bylaws regarding the annual meeting of members and also the calling of special meetings, we might be able to provide some help. It will also help if you can clarify exactly what it is you want to know. There appear to be lots of irregularities in what you have described, most of which is probably water under the bridge at this point.

 

 

Edited by Richard Brown
Added last sentence
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Question 1: Do the bylaws give the treasurer the authority to call special meetings? If not then the board should issue an order declaring the treasurer's letter as spurious, and possibly censure the treasurer for improper exercise of authority which he/she did not possess.

Question 2: If the bylaws allow the membership to call special meetings, have all bylaw and statutory requirements been fulfilled in regard to the August meeting? If they have then the August meeting is on.

Question 3: Do the bylaws give the general membership the authority to recall the officers? If I understand the structure of your HOA the membership can elect the board members but the bylaws allow the board to determine which individual will exercise which office. The authority over board member and officer may have been conflated. If not then the membership could remove an individual as a member of the board, but the board itself has the authority to determine who is which officer.

As to the rest, I sympathize with the HOA member's predicament, however, it presents no parliamentary procedure issue. You have already contacted an attorney and I am afraid that he will have to guide you as to the resolution of the dispute between the membership and the developer.

 

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2 hours ago, Guest Tammy C said:

An attorney has been contacted.  However, a meeting is required to approve the expense of an attorney.

Some of you may need to personally hire the attorney, and hope that when your side prevails that the Board or membership will approve paying that fee.

From a parliamentary point of view, my first question is what do your bylaws say about the calling of special meetings? Who can do so and How many does it take to require a meeting to be called?

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8 hours ago, Hieu H. Huynh said:

What is your question?

Apology.  The entire circus is a bit overwhelming at this time:

"a meeting is required to approve the expense of an attorney.  Time is now a critical factor.  Guidance for proper notice and meeting 'type' is requested."  

Can/should the board schedule a meeting at this time?   Is there a particular 'type' of *board* meeting that should be called?  Emergency?  Executive session?  Is a 10 day notice applicable?

Thank you.

Tammy

 

 

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38 minutes ago, Guest Tammy C said:

Apology.  The entire circus is a bit overwhelming at this time:

"a meeting is required to approve the expense of an attorney.  Time is now a critical factor.  Guidance for proper notice and meeting 'type' is requested."  

Can/should the board schedule a meeting at this time?   Is there a particular 'type' of *board* meeting that should be called?  Emergency?  Executive session?  Is a 10 day notice applicable?

 

Guest Tammy, I think the answer to those questions about a special board meeting will be found in your bylaws. Therefore, I have the same question that Dr. Kapur asked: what do your bylaws say about special meetings of the board? Since this is a homeowner association, I feel fairly confident that your bylaws or stste law specify the procedure for calling a special board meeting.

As to the annual meeting of the general membership and special meetings of the membership,, what do the bylaws say? Do they specify a date or a month for the annual meeting? again, I believe your bylaws probably address those issues. State law might also address either the annual membership meeting or special membership meetings or both. Both your own rules and state law would trump the provisions in RONR.

 One final point: special meetings of the board and the membership can be held only if permitted by your bylaws or state law.

 

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Guest the State of N
8 hours ago, Atul Kapur said:

Some of you may need to personally hire the attorney, and hope that when your side prevails that the Board or membership will approve paying that fee. 

From a parliamentary point of view, my first question is what do your bylaws say about the calling of special meetings? Who can do so and How many does it take to require a meeting to be called?

I personally hired an attorney.  My retainer payment has been cashed.  Attorney was hired when Treasurer refused to allow another officer to become a signatory on the out-of-state bank account.  In the event of the Treasurer illness or inability, there is NO access to the association's account.  Attorney asks "Why haven't you voted to remove the Treasurer?"  Directors are prepared to remove the Treasurer, but stood down when the developer stated we had been removed.  We are confident that removing the treasurer will not change anything.  If we voted to remove the Treasurer,  legal action will still be required before she complies.

Bylaws Article III: 

Section 1: Annual Meetings: "Annual meetings of members for the election of directors and for other business as may be stated in the notice of the meeting, or as may properly come before the meeting, shall be held at such places, within the state of New Mexico, and at such times and dates as the Board of Directors, by resolution, shall determine as set forth in the notice of the meeting.  In the event the Board of Directors fails to so determine the time, date and place of the meeting, the annual meeting of Members shall be held at the principal office of the corporation on the third Sunday of May at 2:00 pm of each year."

- Years ago it was determined that May was too cold and too wet.  Directors have since used Labor Day, Sept 1.  We are a frontier community, far beyond rural.  Our Articles provide that we are a road maintenance organization.  Last year our annual meeting was postponed due to weather.  Attempting to prevent unnecessary damage to our horribly muddy roads that are dangerous and require 4WD, and also to prevent torn up driveways of the host/hostess,  the board approved a motion (in June) to hold the annual meeting in October, well past our monsoon season.  The Treasurer does not attend meetings at our elevation due to health concerns. 911 response time is a minimum of 1 hour in good weather. 

Section 2.:  Special Meetings: - "Special Meetings of the Members may be called at any time by the President or by a majority of the Board of directors or Members who are entitled to vote."

- Is our interpretation correct that 'by a majority' applies to 'Members' too.  Our subdivision has 144 lots.  72 would be the target number?  The email received from the Treasurer is only addressed to 8 of the 50+ email addresses generally used for 'proper notice'.  We are unaware how or if the remaining members were notified.

-The developer holds 49 votes/lots.  30 are unsold properties.  19 repossessed properties.  8 Friends who were previous directors, the treasurer and former president carry the additional votes/lots to reach the target of 72.  We just haven't seen any documentation of how this meeting was called, and were only aware when the email arrived.

Article IV,  Directors:

Section 1: "The number of directors shall be no fewer than three.  The directors shall be elected at the annual meeting of Members and each director shall be elected to serve until his successor shall be elected and is qualified to serve on the board.

Article V, Officers and their duties

Section 2. Election of Officers:  The election of officers shall take place at the first meeting of the Board of directors following each annual meeting of the Association Members.

- Keep in mind that Officers have been elected by the members for over a decade, at the annual membership meeting.  Old habits die hard.  Newer directors are not comfortable with continuing with 'the way we've done it for years', and insist on compliance with community documents.

Board meetings were held by the former president an hour prior to the annual members meeting.  They resist the notion that our association is governed by statute and an HOA act.  They are not familiar with our community documents. 

If we call a board meeting, the majority of directors (5 of 7) would vote to use Association monies and allow the attorney to sort this out on behalf of all landowners.  The treasurer has notified us that she will not issue a check and landowners can decide at the next meeting if legal counsel is warranted.

I am looking for guidance on conducting a board meeting under these circumstances.  I  will talk with the attorney on Monday, but I would like to send out a board meeting notice a.s.a.p. (yesterday) if possible.

Thank you

Tammy

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I don't see anything in your bylaws that you've quoted that give the developer the power to remove directors, so I'm not sure why anyone is giving that any credibility at all. You may want to check with the attorney to see if any laws give the developer that power, but from what you've quoted I see no reason to believe that the directors actually have been removed.

It sounds like your board has adopted a resolution to set the time of the annual meeting, so I am not sure about the validity of the treasurer's notice. Again, check with your attorney.

Edited by Atul Kapur
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I also question the validity of any secret meeting of the members at which a special meeting could be authorized.  Since you are presumably a member, and were not informed of this meeting of the members, it is not properly called, and is null and void.

Also I question whether a Special Meeting can be designated as the Annual Meeting.  

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